Many IT companies reluctant to disclose revenue details

A large number of IT companies registered with Pakistan Software Export Board (PSEB) exporting services do not report to the State Bank of Pakistan (SBP) about their revenue as only 40 out of total 1042 registered units are providing revenue data to the central bank, sources in the PSEB said on Thursday.
This has been the major reason of huge gap in figures reported by the SBP and PSEB. The revenue of IT sector reported by the SBP under BPM-5 is only $116 million for the fiscal 2006-07 whereas unreported revenue is over $1.4 billion under Business Process Methodology-6 (BPM), they added.
An official of PSEB who wished not to be named said that majority of the IT companies do not report foreign transaction to the SBP and keep their earning in foreign banks.
Hardly 40 companies, of the total 1042 registered with the PSEB, reports to the SBP. The revenue reported by the SBP indicates an increase of 61.18 percent in IT exports compared to the previous year's export revenue figure of $72 million. A PSEB spokesman said that BOP and call centres had contributed significantly in the increasing exports due to adequate telecom facilities and trained manpower.
Considering that the 15 percent GST imposed on computer hardware in the federal budget 2006-07 has not yet been removed, this rise in IT exports is remarkable.
The current IT exports annual growth rate is still understated as only 5 percent of the country's registered companies file their exports data with SBP. PSEB is making vigorous efforts to ensure that the export figures of all IT companies are reported to SBP.
The SBP adopted the Business Process Methodology-5 (BPM) system to report the IT exports revenue whereas the Reserve Bank of India, on the other hand, follows the BPM-6 reporting system, which raises its exports to billions of US dollars.
The BPM-6 includes sales to multinationals, earnings of overseas officials and salaries of non-immigrant overseas workers to export revenue. Utilising the BPM-6, Pakistan IT industry's exports are estimated at US $1.4 billion whereas the total industry size is estimated at US $2.8 billion.
With over 1042 IT companies, the country's IT exports have grown by an average of 50 percent during the last couple of years. The PSEB has been facilitating the country's IT industry through its programs in human capital, office space, marketing, company capability development, telecom bandwidth, industry finance, public policy, strategy and research and facilitation.